TAIPEI, Taiwan and MILPITAS, Calif., Feb. 07, 2018 (GLOBE NEWSWIRE) -- Silicon Motion Technology Corporation (NasdaqGS:SIMO) (“Silicon Motion” or the “Company”) today announced its financial results for the quarter ended December 31, 2017. For the fourth quarter, net sales increased 7% sequentially to $136.2 million from $127.2 million in the third quarter. Net income (GAAP) decreased to $9.9 million or $0.27 per diluted ADS (GAAP) from a net income (GAAP) of $17.6 million or $0.49 per diluted ADS (GAAP) in the third quarter.

For the fourth quarter, net income (non-GAAP) increased to $28.4 million or $0.79 per diluted ADS (non-GAAP) from a net income (non-GAAP) of $20.3 million or $0.57 per diluted ADS (non-GAAP) in the third quarter.

During the fourth quarter, we had $3.2 million of capital expenditures for the routine purchase of software and design tools.

Our fourth quarter cash flows were as follows:

3 months ended Dec. 31, 2017

(In $ millions)

Net income (GAAP)

9.9

Depreciation & amortization

3.8

Impairment loss of goodwill

10.3

Gain from disposal of other assets

(1.9)

Changes in operating assets and liabilities

(9.8)

Others

7.4

Net cash provided by operating activities

19.7

Acquisition of property and equipment

(3.5)

Net cash used in investing activities

(3.5)

Dividend

(10.7)

Loans

25.0

Net cash provided in financing activities

14.3

Effects of changes in foreign currency exchange rates on cash

1.3

Net increase in cash, cash equivalents and restricted cash

31.8

Returning Value to ShareholderOn October 24, 2017, the Board of Directors of the Company declared a $1.20 per ADS annual dividend to be paid in quarterly installments of $0.30 per ADS. On November 23, 2017, we paid $10.7 million to shareholders as the first installment of our annual dividend.

On August 1, 2017, the Company announced that its Board of Directors had authorized a new program for the Company to repurchase up to $200 million of its ADS over a 12 month period. In the fourth quarter, the Company did not repurchase any of its ADS.

Business Outlook“This year, we believe that we will benefit from better industry dynamics. As NAND industry supply continues to increase, we expect both NAND cost and prices will fall further,” said Wallace Kou, President and CEO of Silicon Motion. “Our NAND partners are placing more emphasis on their client SSDs because of strong interest by PC and other OEMs in increasing adoption of SSDs, which is highly dependent on how quickly NAND prices fall. We believe NAND prices will fall quickly, but do not have good visibility on this, so our revenue guidance assumes SSD demand based solely on today’s NAND prices. We will revise our guidance when there is better clarity on market trends. In Q1, we believe that growth of SSD and eMMC controller sales should be more than offset by seasonal decline of our SSD solutions.”

For the first quarter of 2018, management expects:

GAAP

Non-GAAP Adjustment

Non-GAAP

Revenue

$127m to $132m-7% to -3% Q/Q-1% to +4% Y/Y

--

$127m to $132m-7% to -3% Q/Q-1% to +4% Y/Y

Gross margin

46.4% to 48.4%

Approximately $0.1m*

46.5% to 48.5%

Operating margin

17.8% to 20.0%

Approximately $3.9m to 4.0m**

21.0% to 23.0%

* Projected gross margin (non-GAAP) excludes $0.1 million of stock-based compensation.** Projected operating margin (non-GAAP) excludes $0.7 million of amortization of intangible assets, and $3.2 million to $3.3 million of stock-based compensation.

For the full-year 2018, management expects:

GAAP

Non-GAAP Adjustment

Non-GAAP

Revenue

$550m to $576m+5% to +10% Y/Y

--

$550m to $576m+5% to +10% Y/Y

Gross margin

46.9% to 48.9%

Approximately $0.5m*

47.0% to 49.0%

Operating margin

19.4% to 21.9%

Approximately $17.8m to19.8m**

23.0% to 25.0%

* Projected gross margin (non-GAAP) excludes $0.5 million of stock-based compensation.** Projected operating margin (non-GAAP) excludes $2.8 million of amortization of intangible assets, and $15 million to $17 million of stock-based compensation.

Conference Call & Webcast:

The Company’s management team will conduct a conference call at 8:00 am Eastern Time on February 7, 2018. SpeakersWallace Kou, President & CEO Riyadh Lai, CFOJason Tsai, Senior Director of Investor Relations and Strategy

To supplement the Company’s unaudited selected financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company discloses certain non-GAAP financial measures that exclude stock-based compensation and other items, including gross profit (non-GAAP), operating expenses (non-GAAP), operating profit (non-GAAP), net income (non-GAAP), and earnings per diluted ADS (non-GAAP). These non-GAAP measures are not in accordance with or an alternative to GAAP, and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with the Company’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measure. We compensate for the limitations of our non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

Our non-GAAP financial measures are provided to enhance the user’s overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude certain expenses, gains and losses that we believe are not indicative of our core operating results and because they are consistent with the financial models and estimates published by many analysts who follow the Company. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with our forecasts, and for benchmarking our performance externally against our competitors. Also, when evaluating potential acquisitions, we exclude the items described below from our consideration of the target’s performance and valuation. Since we find these measures to be useful, we believe that our investors benefit from seeing the results from management’s perspective in addition to seeing our GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:

the ability to make more meaningful period-to-period comparisons of the Company’s on-going operating results;

the ability to better identify trends in the Company’s underlying business and perform related trend analysis;

a better understanding of how management plans and measures the Company’s underlying business; and

an easier way to compare the Company’s operating results against analyst financial models and operating results of our competitors that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of each of the adjustments that we incorporate into our non-GAAP measures, as well as the reasons for excluding each of these individual items in our reconciliation of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges related to the fair value of restricted stock units awarded to employees. The Company believes that the exclusion of these non-cash charges provides for more accurate comparisons of our operating results to our peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact of share-based compensation on its operating results.

Amortization of intangibles assets consists of non-cash charges that can be impacted by the timing and magnitude of our acquisitions. The Company considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.

Litigation expenses consist of legal expenses relating to intellectual property disputes, commercial claims and other types of litigation. While litigation may arise in the ordinary course of our business, we nevertheless consider litigation to be an unusual and unplanned activity and therefore exclude this charge when presenting non-GAAP financial measures.

Impairment of goodwill evaluates the recoverability of goodwill annually, or sooner if events or changes in circumstances indicate that the carrying amount may not be recoverable.

Foreign exchange gains and losses consist of translation gains and/or losses of non-US$ denominated current assets and current liabilities, as well as certain other balance sheet items which result from the appreciation or depreciation of non-US$ currencies against the US$. We do not use financial instruments to manage the impact on our operations from changes in foreign exchange rates, and because our operations are subject to fluctuations in foreign exchange rates, we therefore exclude foreign exchange gains and losses when presenting non-GAAP financial measures.

Impairment of long-term investments relates to the other-than-temporary, non-operating write down of the Company's minority stake investments. We do not consider these investments, which were made before 2007, to be strategic and exclude the performance of these investments when evaluating our ongoing performance and forecasting our earnings trends, and therefore excluding losses (and gains) from the investments when presenting non-GAAP financial measures.

We are the global leader in supplying NAND flash controllers for solid state storage devices and the merchant leader in supplying SSD controllers. We have the broadest portfolio of controller technologies and solutions and ship over 750 million NAND controllers annually and have shipped over five billion NAND controllers in the last ten years, more than any other company in the world. Our controllers are widely used in embedded storage products such as SSDs and eMMCs which are found in smartphones, PCs and industrial and commercial applications. We also supply specialized high-performance hyperscale data center and industrial SSD solutions. Our customers include most of the NAND flash vendors, storage device module makers and leading OEMs. For further information on Silicon Motion, visit us at www.siliconmotion.com.

Forward-Looking Statements:This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, statements about Silicon Motion’s currently expected first quarter of 2018 and full year 2018 expectations of revenue, gross margin and operating expenses, all of which reflect management’s estimates based on information available at this time of this press release. While Silicon Motion believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts for the first quarter of 2018 and full year 2018. Forward-looking statements also include, without limitation, statements regarding trends in the semiconductor or consumer electronics markets and our future results of operations, financial condition and business prospects. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and actual market trends or our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to the unpredictable volume and timing of customer orders, which are not fixed by contract but vary on a purchase order basis; the loss of one or more key customers or the significant reduction, postponement, rescheduling or cancellation of orders from these customers; general economic conditions or conditions in the semiconductor or consumer electronics markets; decreases in the overall average selling prices of our products; changes in the relative sales mix of our products; changes in our cost of finished goods; the payment, or non-payment, of cash dividends in the future at the discretion of our board of directors and any announced planned increases in such dividends; the effect, if any, on the price of our ADS as a result of the implementation of the announced share repurchase program; changes in our cost of finished goods; the availability, pricing, and timeliness of delivery of other components and raw materials used in our customers’ products; our customers’ sales outlook, purchasing patterns, and inventory adjustments based on consumer demands and general economic conditions; any potential impairment of acquired businesses; our ability to successfully develop, introduce, and sell new or enhanced products in a timely manner; and the timing of new product announcements or introductions by us or by our competitors. For additional discussion of these risks and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed on April 28, 2017, as amended on May 2, 2017. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.